After hitting resistance at 118.6, price has been in a downwards trend. Admittedly I have recently been looking for setups that support a bullish dollar and retest resistance at this level. This has not happened and I have decided to look at the potential set up that continues the weakening of the dollar and this trend's downtrend since the beginning of the year.
Price bounced off support at 112 twice and has now broken through. Sticking to my preference of harmonic patterns, the 5-0 pattern suggests that price will reach the 161.8% extension of wave AB (2/3), and retrace 50% of the BC wave (3/4) before price continues in the downwards direction. a 50% retracement at this level would fit the bill as previous support would then becoming resistance.
The 5-0 ratios identify the BC wave as an extension that should turn between 161.8% and 224%. If price edges past 224% then the pattern is not valid. If price turns after the 161.8% but still before the 224%, then the 50% retracement at which we enter should be adjusted accordingly.
Good luck!
5-O Ratios
B(3):1.13-1.618
C(4):1.618-2.24
D(5):50%
Price bounced off support at 112 twice and has now broken through. Sticking to my preference of harmonic patterns, the 5-0 pattern suggests that price will reach the 161.8% extension of wave AB (2/3), and retrace 50% of the BC wave (3/4) before price continues in the downwards direction. a 50% retracement at this level would fit the bill as previous support would then becoming resistance.
The 5-0 ratios identify the BC wave as an extension that should turn between 161.8% and 224%. If price edges past 224% then the pattern is not valid. If price turns after the 161.8% but still before the 224%, then the 50% retracement at which we enter should be adjusted accordingly.
Good luck!
5-O Ratios
B(3):1.13-1.618
C(4):1.618-2.24
D(5):50%
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